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    Telkomsel Case

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    Prana Sabda Prabawa
    This document discusses the political, economic, and social background in Indonesia leading up to 1997-1998 when the country experienced a monetary crisis. It then summarizes the deregulation of Indonesia's telecommunications market after the crisis and the strategies employed by Telkomsel, the largest cellular provider, to address challenges like corruption, crime, and improving network quality as the market grew rapidly. Finally, it provides recommendations for Telkomsel to ensure investment in infrastructure, build organizational performance, drive marketing innovation, and develop its mobile data services to maintain dominance in the expanding market.

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    Telkomsel Case

    Uploaded by

    Prana Sabda Prabawa
    148 views13 pages
    This document discusses the political, economic, and social background in Indonesia leading up to 1997-1998 when the country experienced a monetary crisis. It then summarizes the deregulation of Indonesia's telecommunications market after the crisis and the strategies employed by Telkomsel, the largest cellular provider, to address challenges like corruption, crime, and improving network quality as the market grew rapidly. Finally, it provides recommendations for Telkomsel to ensure investment in infrastructure, build organizational performance, drive marketing innovation, and develop its mobile data services to maintain dominance in the expanding market.

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    Telkom Case

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    This document discusses the political, economic, and social background in Indonesia leading up to 1997-1998 when the country experienced a monetary crisis. It then summarizes the deregulation of Indonesia's telecommunications market after the crisis and the strategies employed by Telkomsel, the largest cellular provider, to address challenges like corruption, crime, and improving network quality as the market grew rapidly. Finally, it provides recommendations for Telkomsel to ensure investment in infrastructure, build organizational performance, drive marketing innovation, and develop its mobile data services to maintain dominance in the expanding market.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    148 views13 pages

    Telkomsel Case

    Uploaded by

    Prana Sabda Prabawa
    This document discusses the political, economic, and social background in Indonesia leading up to 1997-1998 when the country experienced a monetary crisis. It then summarizes the deregulation of Indonesia's telecommunications market after the crisis and the strategies employed by Telkomsel, the largest cellular provider, to address challenges like corruption, crime, and improving network quality as the market grew rapidly. Finally, it provides recommendations for Telkomsel to ensure investment in infrastructure, build organizational performance, drive marketing innovation, and develop its mobile data services to maintain dominance in the expanding market.

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    © All Rights Reserved
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    of 13

    By Syndicate 3:

    NIENDY YUSFITASARI (TEAM LEADER)


    ANGGORO INDRO PRADIPTO
    DEDY SURYAWAN
    WAHDANI HAKIM
    PRANA SABDA PRABAWA


    TELKOMSEL: TRANSFORMING AN
    EMERGING-MARKET STATE ENTERPRISE
    The Case Issue
    POLITICAL, ECONOMIC, AND SOCIAL BACKGROUND

    REGULATION AND DEREGULATION
    TELKOMSELS STRATEGY REVIEW
    INDONESIAS CELLULAR TELECOMMUNICATIONS MARKET

    SPECIAL CHALLENGES OF DOING BUSINESS
    1
    2
    3
    4
    5
    6
    1997-1998 : Indonesia Monetary Crisis
    1997 Indonesia was hit by the Asian financial crisis, accompanied by the worst
    drought in 50 years as well as falling prices for oil, gas, and other commodity
    exports.
    The rupiah plummeted from 2,500 to 17,000 to the US dollar, inflation soared, and
    capital fled.
    The IMF and World Bank, agreeing in 1997 to help reconstruction, imposed
    conditions for reform, including removing monopolies and setting up independent
    regulatory agencies.
    GDP growth was still very low at 0.8 percent in 1999, compared to 7.8 percent in
    1996.
    In 1999 there were 48 million poor people, or 24 percent of the total population.

    POLITICAL, ECONOMIC, AND SOCIAL
    BACKGROUND
    INDONESIAS CELLULAR
    TELECOMMUNICATIONS MARKET

    Templates
    Telco Industry In General

    Nationwide
    Service
    Telkomsel
    Satelindo
    Regional Players
    Excelcomindo
    Komselindo
    Metrosel
    Mobisel
    Telesera
    Customer and Market Penetration
    INDONESIAS CELLULAR
    TELECOMMUNICATIONS MARKET

    Telco market
    Penetration 1999-2000
    Customer Growth
    1996-2000
    Your own sub headline

    INDONESIAS CELLULAR
    TELECOMMUNICATIONS MARKET

    Your own footer Your Logo
    Investor
    Impact of monetary crisis :
    1. Instability in politic made foreign investor didnt continue invest in
    Indonesia.
    2. Telkom & Indosat became among the cheapest telecom stocks in Asia.
    3. Depreciation of the rupiah made it hard for operators to pay their US-dollar
    denominated debts: Excelcomindo had US$400 million in debt, Satelindo
    US$250 million, and Telkomsel US$150 million.


    Nationwide Service Cellular
    Ownership
    1999-2000
    Cross Shareholding Among
    Telecom Companies (Exhibit 2)
    m
    REGULATION
    2
    Before crisis, foreign company involvement in
    fixed-line services was limited and only 3549
    %.

    After crisis, Full foreign ownership of cellular,
    paging, data and other value-added services
    through foreign investment were allowed.
    (although still limited insome case)

    Government set maximum tariff limits
    forinstallation fees, connection andactivation
    fees, airtime rates, and monthly subscription
    fee.


    BUSINESS CHALLENGE
    Nepotism & Collusion

    o Telkomsel had access to install the antenna on top of the Telkoms building all over
    Indonesia as to minimize the cost of rent

    o Licenses to use the electromagnetic spectrum, without which cell phone companies
    could not operate, were awarded not by open auction. Telkomsel benefited from its
    government ties when spectrum licenses were awarded.

    o Satelindo was given priority when the government initially gave out cellular service
    licenses as has been known that PT. Satelindo part owned by PT. Bimantara Citra,
    the holding company for ex-President Suharto's second son, Bambang
    Trihatmodjo.


    BUSINESS CHALLENGE
    Corruption

    In order to purchased 17% stake in Telkomsel, KPN had to guaranteed Sedtcos
    bank loan to also buy 5% stake by granting a put option to the bank

    Crime
    Customers were giving fake names and addresses, and could not be tracked down
    when it came time to collect on bills.


    PROBLEM
    Market Analysis
    o Cellular market was set for rapid & sustained growth
    Capabilities & Competitive Assestment
    o Customer Service: customer perceived of bad service
    o Marketing: lack of product & service innovation
    o Mobile data service: preparation for upcoming increasing
    demand of mobile data
    o Network: poor network quality & perfomance
    o Enabling Infrastructure: billing system not ready for service
    growth
    o Organization: individual performance not reflecting corporates
    performance

    Ensure investment in network capacity in order to guarantee quality service to
    existing clients & to capture new clients and retain its dominant market share
    Build a high-performance organization
    Innovation in marketing
    Invest in network ahead of growth in demand

    Build a service culture
    Set up data incubator

    Build IT & billing system structures

    Strategy Recommendations
    1
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    3
    4
    5
    6
    7
    THANK YOU!
    Your Logo

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